Cash may still be king leading the pact over credit cards, debit cards and checks, Kelly said citing industry data, but with mobile transactions expected to replace cash and cards by 2015, credit unions can’t afford to sit on the sidelines.

In 2010, mobile payments totaled $5 billion, Kelly said. In 2015, that figure is set to soar to $119 billion given that more Americans have smartphones and with the continued growth of mobile commerce and remote payments.

“Mobile is a super channel,” Kelly said.

With innovations like Bitcoins, a form of virtual currency, and more merchant partnerships being formed such as between Square and Starbucks and PayPal and Home Depot, Kelly said there are opportunities for credit unions to be players as well.

PSCU is currently working with several credit unions on a Google Wallet project, Kelly said. He mentioned the $1.2 billion Lake Trust Federal Credit Union in Lansing, Mich., being the first credit union to launch MasterPass, a digital service that allows consumers to use any payment card or enabled device to shop. Mobile subscribers are up by 28% at the $1.5 billion GTE Financial in Tampa, Fla., he added.

“There are credit unions attacking each other and stealing members. I say ‘people we have 6% of the marketplace.’ If we lose our core competency, it will be a long road to hoe,” Kelly said.

He acknowledged that some credit unions feel they can’t make this shift to mobile. Collaboration with CUSOs can help with the transition. Overhauling or upgrading a current card program may be a good entry point as well.

“The thing is some credit unions will spend $3 million for a branch but not on a virtual space,” Kelly said. “Credit unions have to be in the game.”